Pan class action launched

A class action has been launched against the Federal Government on behalf of companies that suffered massive losses after the collapse of Pan Pharmaceuticals.

It is estimated that the claim, to be launched in the Federal Court, could be more than $200 million dollars.

In 2003, the Therapeutic Goods Administration (TGA) recalled 6000 Pan products following questions over their ingredients, and suspended the company's licence. The company subsequently collapsed.

Last month, the Federal Government paid a record $55 million to Pan founder Jim Selim, ending a federal court case that highlighted the actions of senior TGA officials in the lead-up to the decision to suspend Pan's licence.

Mr Selim's solicitors, McLachlan Thorpe Partners, will be acting for the applicants in the new proceedings.

McLachlan Thorpe Partners' Andrew Thorpe said the class action was necessary due to the Federal Government ignoring requests to launch an inquiry into the Pan collapse.

"The win by Mr Selim has opened the door for other people to follow in his footsteps and has paved the way for this class action,'' Mr Thorpe said.

The claim alleges "misfeasance in public office'' in the TGA's actions.

It will be filed against the Commonwealth of Australia and officers and former officers of the TGA, Rita McLachlan, Pio Cesarin, Noel Fraser, Terry Slater and Robert Tribe.

The action is to be funded by IMF (Australia), a listed litigation funder for claims exceeding $2 million.

IMF managing director John Walker said the action included claimants who had suffered millions of dollars in losses, but more companies were still to join.

"The grounds of the claim are already strong but the action will have a greater impact as it grows in size and numbers of claimants,'' Mr Walker said.

IMF has given potential claimants four to six weeks to join the action.

Mr Walker said the class action fell into an "exceptional category'', as evidence in the Selim case showed the respondents knowingly and recklessly broke the law and knew that their actions were likely to cause widespread damage.

A consultant to the class action is Val Johnson, who was head of surveillance at the TGA from 1991 to 1995.